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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): October 29, 1999
Four Media Company
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(Exact name of registrant as specified in its charter)
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<S> <C> <C>
Delaware 0-21943 95-4599440
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(State of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
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2813 West Alameda Avenue
Burbank, California 91505
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(Address of principal executive offices) (Zip Code)
(818) 840-7000
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(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
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On November 1, 1999, Four Media Company, a Delaware corporation (the
"Company"), announced that it had entered into a letter of intent on October 29,
1999 to sell 100% of its issued and outstanding common stock to Liberty Media
Corporation ("Liberty Media"). As contemplated by the letter of intent, 100% of
the Company's issued and outstanding common stock will be acquired in a tax-free
exchange in consideration for the issuance of approximately 6,352,783.5 shares
of Class A Liberty Media Group Stock, par value $1.00 ("LMG.A Shares"). One
LMG.A Share will be issued for each 3.1 shares of Company common stock
outstanding.
Warburg, Pincus Equity Partners, L.P., Fleming Asset Management USA and
Robert T. Walston, collectively holders of approximately 70% of the Company's
issued and outstanding common stock, are expected to enter into agreements with
Liberty Media to vote in favor of the transaction. The transaction is subject to
execution of definitive documentation, expiration of applicable waiting periods
under pre-notification regulations, Company stockholder and Board of Director
approval and other customary closing conditions, including other appropriate
corporate approvals. The parties contemplate that a definitive agreement will be
signed in mid-November 1999 and closing is anticipated to occur the first
quarter of 2000. Copies of the Company's press release and letter of intent are
attached hereto as Exhibit 99.1 and 99.2, respectively, and are incorporated
herein by reference.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
7(c) Exhibits
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99.1 Press release of Four Media Company dated November 1, 1999
99.2 Letter of Intent dated October 29, 1999 by and among Liberty
Media Corporation, Four Media Corporation, Technical Services
Partners, L.P. and Warburg, Pincus Equity Partners, L.P.,
Warburg, Pincus Netherlands Equity Partners I, C.V., Warburg,
Pincus Netherlands Equity Partners II, C.V. and Warburg, Pincus
Netherlands Equity Partners III, C.V.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: November 1, 1999
FOUR MEDIA COMPANY
By: /s/ William E. Niles
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William E. Niles
Vice President of Business Affairs,
General Counsel and Secretary
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EXHIBIT INDEX
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99.1 Press release of Four Media Company dated November 1, 1999
99.2 Letter of Intent dated October 29, 1999 by and among Liberty
Media Corporation, Four Media Corporation, Technical Services
Partners, L.P. and Warburg, Pincus Equity Partners, L.P.,
Warburg, Pincus Netherlands Equity Partners I, C.V., Warburg,
Pincus Netherlands Equity Partners II, C.V. and Warburg, Pincus
Netherlands Equity Partners III, C.V.
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EXHIBIT 99.1
[LOGO OF FOUR MEDIA COMPANY]
FOR IMMEDIATE RELEASE
- ---------------------
LIBERTY MEDIA SIGNS LETTER OF INTENT TO ACQUIRE
100% OF FOUR MEDIA COMPANY
Burbank, California, November 1, 1999 - Four Media Company (Nasdaq: FOUR) today
announced that it has entered into a letter of intent to sell 100% of its issued
and outstanding common stock to Liberty Media Corporation (NYSE: LMG.A). As
contemplated by the letter of intent, one hundred percent (100%) of Four Media's
issued and outstanding stock will be acquired in exchange for approximately 6.35
million shares of Class A Liberty Media Group Stock, par value $1.00 ("LMG.A
Share(s)"). One LMG.A Share will be issued for each 3.1 shares of Four Media
common stock outstanding.
Warburg, Pincus Equity Partners, L.P., Fleming Asset Management USA and Robert
T. Walston, collectively holders of approximately 70% of the issued and
outstanding shares of Four Media, are expected to enter into agreements with
Liberty Media to vote in favor of the transaction. The transaction is subject to
execution of definitive documentation, expiration of applicable waiting periods
under pre-notification regulations, Four Media stockholder and Board of Director
approval, and other customary closing conditions, including other appropriate
corporate approvals. The parties contemplate that a definitive agreement will
be signed in mid-November 1999 and closing is anticipated to occur in the first
quarter of 2000.
Commenting on the announcement, Robert T. Walston, Chairman and Chief Executive
Officer of Four Media Company, stated, "Liberty Media is an exciting company
with far reaching relationships and resources. Liberty envisions the
development of a global services and infrastructure company that will be the
catalyst for the creation and delivery of new forms of entertainment and
advertising content. We are pleased that Liberty Media has recognized the value
that Four Media's management, talented employees, client relationships and
technological expertise can bring to achieving their strategic objectives."
- continued -
Burbank-Culver City-Hollywood-London-Santa Monica-San Francisco-Singapore-
Universal City
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Page 2 [LOGO OF 4MC]
David P. Beddow, Vice President of Liberty Media, said, "We are impressed with
the breadth and scale of Four Media's operations and the quality of their
investments in digital infrastructure. Four Media is an important asset in our
services and infrastructure development strategy."
Four Media Company is a leading provider of technical and creative services to
owners, producers and distributors of television programming, feature films and
other entertainment product both domestically and internationally. The
Company's services integrate a variety of systems and processes to enhance the
creation and distribution of entertainment content. Four Media's client base
includes the world's largest entertainment companies. As a result of its
investments and acquisitions, Four Media Company is one of the largest and most
diversified providers of technical and creative services to the entertainment
industry, which enables the Company to offer its customers a single source for
such services.
Liberty Media holds interests in a broad range of video programming,
communications, technology and Internet businesses in the United States, Europe,
South America and Asia. Liberty Media Group Class A and Class B Stock are
traded on the New York Exchange under the symbols LMG.A and LMG.B, respectively.
This press release contains forward-looking statements which are made pursuant
to the Safe-Harbor provisions of the Private Securities Litigation Reform Act of
1995. Words such as "intends", "believes" and similar expressions reflecting
something other than historical fact are intended to identify forward-looking
statements, but are not the exclusive means of identifying such statements.
These forward-looking statements involve a number of risks and uncertainties,
including the execution of definitive documentation relating to the Liberty
acquisition, the closing of the Liberty acquisition, the timely development and
market acceptance of products and technologies, successful integration of
acquisitions, the ability to secure additional sources of financing, the ability
to reduce operating expenses and other factors described in the Company's
filings with the Securities and Exchange Commission. The actual results that the
Company achieves may differ materially from any forward-looking statement due to
such risks and uncertainties. The Company undertakes no obligations to revise or
update any forward-looking statements in order to reflect events or
circumstances that may arise after the date of this release.
# # #
For additional information contact:
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Robert T. Walston
Chairman and Chief Executive Officer
Jeffrey J. Marcketta
President and Chief Operating Officer
FOUR MEDIA COMPANY
2813 W. Alameda Avenue
Burbank, CA 91505
(310) 587-1227 (phone)
(310) 587-1277 (fax)
www.4mc.com (web)
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- continued -
Burbank-Culver City-Hollywood-London-Santa Monica-San Francisco-Singapore-
Universal City
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EXHIBIT 99.2
LIBERTY MEDIA CORPORATION
9197 South Peoria Street
Englewood, Colorado 80112
Telephone: (720) 875-5400
October 29, 1999
Gentlemen:
This letter of intent (this "Letter") sets forth the understanding and
mutual intentions of Liberty Media Corporation ("Liberty Media"), Four Media
Company (the "Company"), the Warburg Entities and Technical Services Partners,
L.P. (the "Stockholders"), with respect to the proposed transactions
(collectively, the "Transaction") described in the attached draft Agreement and
Plan of Merger (the "Draft Agreement"). Capitalized terms used herein and not
otherwise defined are used as defined in the Draft Agreement. The Company and
the Stockholders represent and warrant to Liberty Media that the Stockholders
own, in the aggregate, in excess of 50% of the Company's common stock
outstanding on the date hereof.
The Company's execution and delivery to Liberty Media of a copy of this
Letter constitute its representations to Liberty Media that the Company's Board
of Directors (the "Company Board") has (i) duly and validly authorized the
execution and delivery by the Company of this letter and the performance by the
Company of its obligations hereunder in accordance with Section 203 and the
other applicable provisions of the DGCL, (ii) reviewed the enclosed Draft
Agreement relating to the Transaction, and (iii) subject only to entering into
mutually satisfactory definitive documentation for the Transaction (the
"Definitive Documentation") and the terms and conditions therein, duly and
validly approved the Transaction.
The parties intend that the principal terms of the Transaction shall be as
set forth in the Draft Agreement, including without limitation, that one hundred
percent (100%) of Four Media's issued and outstanding stock will be acquired in
consideration for the issuance of approximately 6,352,783.5 shares of Class A
Liberty Media Group Stock, par value $1.00 ("LMG.A Share(s)"). Specifically,
one LMG.A Share will be issued for each 3.1 shares of Four Media stock acquired.
The transaction is intended to qualify as a tax-free exchange. Each of the
undersigned intends, and will use good faith efforts, to enter into Definitive
Documentation (or the exhibits thereto, as applicable) containing the principal
terms set forth in the attached Draft Agreement.
Subject to the second paragraph hereafter and subject to any fiduciary and
other obligations the Company Board may have under applicable law, the Company's
execution and delivery of a copy of this Letter will constitute its agreement
with Liberty Media that it shall not, and will use its best efforts to ensure
that its officers, directors, employees, investment bankers, attorneys,
accountants and other agents
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do not, directly or indirectly (i) initiate, solicit or encourage, or take any
action to facilitate (including by the furnishing of information) the making of,
any offer or proposal that constitutes or is reasonably likely to lead to any
Extraordinary Transaction (as defined below), (ii) enter into any agreement with
respect to an Extraordinary Transaction or (iii) in the event of an unsolicited
Extraordinary Transaction, engage in negotiations or discussions with, or
provide any information or data to, any Person (other than Liberty Media or its
Affiliates or Representatives and except for information that has previously
been publicly disseminated by the Company) relating to any Extraordinary
Transaction. The Company agrees that it will notify Liberty Media immediately,
but in any event within 24 hours, if any proposals, inquiries or expressions of
interest are received by, any information is requested from, or any negotiations
or discussions are sought to be initiated or continued with the Company or its
Representatives, in each case in connection with any Extraordinary Transaction
or the possibility or consideration by a third party of making an Extraordinary
Transaction (an "Extraordinary Transaction Interest"). In the case of an
Extraordinary Transaction Interest, the Company agrees it will provide the name
of the Person indicating such Extraordinary Transaction Interest and the terms
and conditions of any proposals or offers. As used in this Letter,
"Extraordinary Transaction" means any tender or exchange offer involving the
Company, any proposal for a merger, consolidation or other business combination
involving the Company, any proposal or offer to acquire in any manner a greater
than 15% equity interest in, or a significant portion of the business or assets
of, the Company (other than immaterial or insubstantial assets or inventory in
the ordinary course of business or assets held for sale), any proposal or offer
with respect to any recapitalization or restructuring with respect to the
Company or any proposal or offer with respect to any other transaction similar
to any of the foregoing with respect to the Company other than pursuant to the
transactions to be effected pursuant to the Draft Agreement.
Subject to the following paragraph, the execution and delivery of this
Letter by the Stockholders will constitute their agreement with Liberty Media
that each of them, in his individual and representative capacity (other than as
director or officer of the Company), shall not directly or indirectly (i) tender
into any tender or exchange offer or otherwise sell, transfer, pledge, assign,
hypothecate or otherwise dispose of, or encumber with any Lien, any of the
Company's securities; (ii) acquire any shares of common stock or other
securities of the Company (subject to certain exceptions to be set forth in the
Voting Agreement, including, but not limited to, any stock dividend, stock
split, recapitalization, combination or exchange of shares of capital stock or
other securities of the Company, or pursuant to an exercise of outstanding
warrants); (iii) deposit any of the Company's securities into a voting trust,
enter into a voting agreement or arrangement with respect to the Company's
securities or grant any proxy or power of attorney with respect to such
securities (other than any voting agreement or arrangement with Liberty Media or
any of its Affiliates); (iv) enter into any contract, option or other
arrangement or undertaking with respect to the direct or indirect acquisition or
sale, transfer, pledge, assignment, hypothecation or other disposition of any
interest in or the voting of any shares of common stock or any other securities
of the Company; (v) participate or engage in any discussions or negotiations
with any person other than Liberty Media or its Affiliates relating to any of
the foregoing; or (vi) provide any material non-public information regarding the
Company or any of its subsidiaries or any of the Company's securities to any
person other than Liberty Media, its Affiliates, or each Stockholders'
affiliates and advisors in connection with any of the foregoing. If any of the
Stockholders receives any inquiry or proposal regarding the possibility of any
of the foregoing, such party shall promptly notify Liberty Media thereof in
writing and shall provide
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Liberty Media with such information regarding such inquiry or proposal and the
person making the same as Liberty Media shall reasonably request, to the full
extent such information is reasonably available to such party.
Anything contained herein to the contrary notwithstanding, if Definitive
Documentation has not been executed and delivered by the relevant parties on or
before the 30th day following the execution of this Letter (or such other
subsequent date agreed to by the parties ) after good faith efforts to enter
into Definitive Documentation and reach agreement on any material issues that
have not been addressed adequately in the attached Draft Agreement, then any
party may terminate this Letter by written notice to the other parties prior to
the execution and delivery of the Definitive Documentation.
The representations and covenants contained in the second, fourth and fifth
paragraphs of this Letter are intended to be binding upon the parties hereto
(and their respective successors and assigns) upon execution of this Letter and
will continue to be in effect until the termination of this Letter as provided
in the immediately preceding paragraph. Otherwise, this Letter constitutes a
statement of our good faith intentions with respect to the Transaction, but does
not contain all matters upon which agreement must be reached in order for the
Transaction to be consummated and therefore does not constitute a binding
commitment with respect to the Transaction itself. A binding commitment will
result only from the execution of the Definitive Documentation. Notwithstanding
the two preceding sentences of this paragraph, the provisions of and the
obligations of the parties under (i) this paragraph and the immediately
following paragraph (pertaining to governing law) and (ii) the provisions in the
Draft Agreement relating to publicity, finder's fees and expenses are agreed to
be fully binding on the parties hereto upon the execution of this Letter, and
such provisions shall survive the termination of this Letter unless they are
superseded by the Definitive Documentation. The obligations of Liberty Media
and the Company under the Mutual Nondisclosure Agreement dated as of August 13,
1999 between Liberty Media and the Company, shall survive the execution and
delivery of this Letter and any termination hereof.
The terms of this Letter and the relations of the parties with respect
hereto shall be governed by and construed in accordance with the internal laws
of the State of Delaware. This Letter may be executed in one or more
counterparts.
[Signature Page Follows]
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If the foregoing reflects your understanding, please acknowledge your
agreement to, and acceptance of, the foregoing, by executing a copy of this
Letter in the appropriate space set forth below and returning it to the
undersigned, whereupon this Letter will constitute our agreement with respect to
the matters contained herein.
Very truly yours,
LIBERTY MEDIA CORPORATION
By: /s/ David P. Beddow
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Name: David P. Beddow
Title: Vice President
Agreed to and accepted as of the date first written above:
FOUR MEDIA COMPANY
By: /s/ Jeffrey J. Marcketta
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Name: Jeffrey J. Marcketta
Title: President and Chief Operating Officer
TECHNICAL SERVICES PARTNERS, L.P.
By: Triple Bogey, Inc., its general partner
By: /s/ Robert T. Walston
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Name: Robert T. Walston
Title: President
S-1
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WARBURG, PINCUS EQUITY PARTNERS, L.P.
By: Warburg, Pincus & Co., its general partner
By: /s/ David Libowitz
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Name: David Libowitz
Title: Managing Director
WARBURG, PINCUS NETHERLANDS EQUITY
PARTNERS I, C.V.
By: Warburg, Pincus & Co., its general partner
By: /s/ David Libowitz
-----------------------------------------
Name: David Libowitz
Title: Managing Director
WARBURG, PINCUS NETHERLANDS EQUITY
PARTNERS II, C.V.
By: Warburg, Pincus & Co., its general partner
By: /s/ David Libowitz
-----------------------------------------
Name: David Libowitz
Title: Managing Director
WARBURG, PINCUS NETHERLANDS EQUITY
PARTNERS III, C.V.
By: Warburg, Pincus & Co., its general partner
By: /s/ David Libowitz
-----------------------------------------
Name: David Libowitz
Title: Managing Director
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